With consumer nervousness continuing over how far rates will increase, Woolwich has cut the borrowing rate on its two-year fixed rate. The rate drops to 5.89%, 30 basis points below its previous offer.

The deal is also available for purchases and is fixed until 30 September, 2009 at 5.89%, reverting to a lifetime tracker at 0.95% above base rate safeguarding consumers against further interest rate rises. It is available on up to 80% of the property valuation with an application fee of £995 and early repayment charge of 3%.

Andy Gray, head of mortgages at Woolwich, said: “Economists still expect rates to increase this year and with two increases already this summer, consumers who need to budget their monthly outgoings are getting squeezed. This new product allows borrowers to fix now to cover any hikes over the next couple of years.”